Grains, yeasts and fruit products have been fermented into ethanol-containing liquids, since biblical time. Additionally, it has been known for centuries that one can take distilled, fermented ethanol-containing products to thereby form a concentrated ethanol- containing product.
Under conventional circumstances, distillation can concentrate the ethanol content in a “wine or beer-like” fermentation product to approximately 95% alcohol. It is difficult to remove the final 5% of water from the ethanol product through distillation because this final 5% water maintains itself in an azeotropic mixture. However, advanced techniques exist for removing this last 5% of water to achieve a final product comprised of almost pure alcohol.
Ethanol can be produced from a variety of feedstocks. Generally, any feedstock having a sugar or starch content can be fermented and ultimately distilled into an ethanol product. Although ethanol has its most famous use in ethanol-containing beverages, a very large amount of ethanol is produced for use as fuel or a chemical reactant for producing other chemicals. Currently, federal regulations encourage the use of ethanol in gasoline fuel products and most gasoline includes about 10% ethanol. Additionally, it has long been known by vehicle manufacturers that vehicle engines can be modified to burn a fuel that is comprised of approximately 100% ethanol. Currently, 100% ethanol fuels are used in major car racing series, such as NASCAR and INDYCAR.
For fuel production, low cost bulk grains having a high starch content are preferably used as the feedstock from which the alcohol is made. In the Midwestern United States, a favorite feedstock is corn, since corn is grown in abundance in the Midwest. In other areas, such as Brazil where sugar is grown in abundance, sugar cane and stalks are used as a preferred feedstock for creating ethanol, whereas wood chips and particles are often used in the timber rich Northwestern U.S.
Most ethanol plants are set up to use a single feedstock for producing ethanol. In the Midwestern states of the United States, the most typical feedstock is corn.
Other sources of feedstock include some types of feedstock that are available on an ongoing basis, and other types of feedstock that are available from time to time. Examples of such regular, ongoing feedstocks include things such as plant waste.
Plant waste can originate from a variety of sources. For example, in a “pasta plant” there will often be some significant amounts of plant waste that occur because of broken pasta, pasta trimmings, floor sweepings and other pasta scraps that somehow do not make it to a finished boxed product. Additionally, corn chip, potato chip and snack product plants also provide a fairly regular source of starch-containing feedstock that can be converted into alcohol. Currently, much of this product is going to animal feed facilities, and can be purchased at relatively low prices.
Another category of potential feedstock can include feedstock that originates from consumer packaged goods. There is a large variety of consumer packaged feedstock that becomes available on the market from time to time. Such feedstocks might include things such as spoiled or out-of-date cake mixes, soft drink products, spoiled breads, potatoes, flours, along with a whole host of other products that have been packaged for either residential or commercial customers, and that are no longer useable by these residential or consumer customers.
One difficulty with dealing with such consumer products relates to their packaging. Along with the cost of purchasing the feedstock, the costs of handling the feedstock in the plant also affects the overall “price of feedstock” and hence, affects the profitability of the use of the feedstock in the ethanol production facility. It can be very difficult, and very labor intensive for one to separate out, for example, the packaging that accompanies a pallet full of spoiled cake mix boxes; or alternately, to open up pallets of spoiled sodas to dump the sodas in the process input, while throwing away the remaining bottles.
Prior to the Applicant's invention, it was difficult, if not impossible for ethanol plants to switch easily between various feedstock types. One thing that made it difficult to switch between feedstocks of different origin, such as switching between a corn flour based feedstock and a wheat flour based feedstock was the different starch content of the various different feedstocks. However, it is even more difficult for a facility to switch between a “flour” feedstock such as a corn flour, and a “kernel” feedstock, such as kernel corn because of the differences in handling required for the different feedstocks.
Currently in the Midwestern United States, the primary feedstock used in ethanol plants is kerneled corn that is bulk delivered to an ethanol plant in either a rail car or a truck. This kerneled corn is then passed through a hammer mill where it is pulverized into a flour and then processed by fermentation and distillation into ethanol. In contrast, a flour feedstock does not behave well in a hammer mill and preferably should not be run through a hammer mill or placed in a holding silo with kerneled feedstock.
Nonetheless, to the extent that flour products are introduced into prior art ethanol plants, the flour feedstocks are passed through a hammer mill, as the hammer mill usually provides the only viable gateway to the cooking and other downstream processing portions of the plant.
Several significant incentives exist for being able to use different feedstocks. In particular, ethanol is often viewed by purchasers, such as oil refining and marketing companies as a “commodity” product. As a commodity product, buyers tend to view ethanol sold from various producers as being fungible, thus leading buyers to purchase their supply of ethanol from the supplier having the lowest prices, or the lowest prices set by the market. Therefore, as with most commodity products, it is not unusual for profit margins for ethanol producers to come under pressure.
One of the most important influencing factors on the final cost of producing ethanol is the cost of the original feedstock which represents over 85% of most ethanol plants' cost of goods sold. Therefore, if one is wedded to the use of a single feedstock, the cost of one's feedstock input will vary along with the current market price of that particular feedstock. If the cost of that particular feedstock rises, and it is difficult for one to maintain consistent feedstock input prices, the cost of producing ethanol at a constant, reasonable cost becomes challenging.
Unfortunately, an ethanol producer is not always in a position wherein he/she can raise the price of its finished ethanol product to reflect the increase in its feedstock prices. One difficulty faced by ethanol producers is that the prices of feedstock corn and finished product ethanol do not always rise or fall together in a lock-step fashion. In some situations, the ultimate buyers of the ethanol output want to pay a constant price for their ethanol, and thus often desire to lock in the ethanol producer into a long term fixed price contract that may not provide the plant flexibility to change its price charged to reflect the changes in prices of the feedstock.
One of the keys to running an ethanol plant at a profit is to purchase its feedstocks at low, competitive, price levels. To a certain extent, one can obtain lower feedstock prices with as single input feedstock grain by timing the purchase of that feedstock at “market valleys”. Unfortunately, the lower prices available through strategically timed purchases are often insufficient to achieve overall profitability of the plant or requires excessive market speculation. Further, there are a large number of other feedstock consumers, such as cattle feeding operations, pig farm, chemical plants, food processors and other ethanol producing facilities that are competing for the same low cost feedstocks.
In order to improve profitability, it would be desirable to be able to take advantage of alternate feedstocks, so that one will have a greater variety of feedstocks to choose from and therefore enable the ethanol producer to take advantage of the short term and/or long term opportunities to purchase such feedstocks cost effectively, and thereby boost profitability. For example, the weather during a certain year may be highly unfavorable for corn, but highly favorable for wheat crops, thus causing the price of corn to rise and the price of wheat to fall. In such a case, it would be advantageous to be able to switch from corn to wheat as a feedstock and take advantage of the lower prices available.
Other situations arise on a “spot” basis that enables one to take advantage of ephemeral discounted prices in the market. For example, from time-to-time a train car load of a flour product or sugar product that is destined for a food processor, such as Kellogg's or Pillsbury is determined to be off-spec and/or have an unacceptable contamination issue from a variety of factors including excessive moisture, natural toxins, or insect infestation. A more complete of reasons why feedstocks can become contaminated or distressed and rejected from the human food chain are detailed on Exhibit 1 below.